It is important to be able to flex downwards

Companies that get “greedy” and do unethical things do so because they can’t shrink.

They are either unwilling to fire people or unable/unwilling to forego revenue. Thus they can’t compress and have to stretch (ethically) to get more.

  • Free to play games – why can’t they shrink? hyper competitive market + customer transience. This results in a land grab “get it while you can mentality” and the influence of single interaction game theory (aka single shot/single stage).
  • Oil and Gas, Tobacco – stock price pressures + CEO tenure/board tenure dynamics. What company wants to see their stock price go down? Who wants to be the leader that will “refound” the company and wade through the valley of death? Why not take the easy path and accrue wealth (risk reward issues with current compensation structures)

A thought experiment – one loaf of bread and you are starving

  • just you – you can live for some time
  • you + family of five – you’ll be more open-minded to taking some other family’s bread
  • you + another hunter – you’re not worried about bread

The way to escape this conundrum is to either (A) make yourself flexible downwards (in the various areas of your life, but particularly personal finance) and (B) focus on opportunities.

This reduces to the very simple “experiment and kill failures”, but the expansion was useful for me.


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